The future of NFT has unlimited space for exploration.
Since entering the second half of 2021, in an environment where the overall crypto-asset market continues to a downtrend, the NFT space, represented by blockchain games, meta-universe, etc., has immersed with the market’s attention. From the earliest NBA stars, Twitter founders to the recent Coca-Cola branded NFT launch auction, with the addition of paintings, music, digital works, gaming equipment, etc., Are tools that surge up the demand and value of NFT work.
The core idea is to be completely different from traditional mainstream digital currencies such as bitcoin and ethereum; the non-fungible token or NFT has become a “value machine” that empowers everything based on its unique characteristics of scarcity, indivisibility, and uniqueness. Although NFT mainly focuses on the digital confirmation, circulation, and transaction of virtual property such as game equipment and artworks in the short term. But for the market, along with the perfection of the prediction machine system, the future stocks, private equity, car property, real estate will undoubtedly become the significant space that NFT will carry.
However, in NFT, this “value machine” relies on the economic and social value system that brings a complete disruptive change before the market seems to need more projects to complete innovation and experimentation. To completely solve the inefficiency, slow price discovery, centralized pricing power, profit distribution, complete discovery of value, and many other problems. Recently, the emergence of “CryptoShow,” an NFT auction and depository trading platform designed to be decentralized and license-free, may have brought the NFT market to the direction of innovation and iteration.
Why does NFT have a broad market survival ground?
“A pair of socks from Uniswap sold for $160,000, five words from the founder of Twitter fetched $2.5 million, and crypto artist Beeple’s NFT auction work at Christie’s received $9.75 million in bids ……” In the eyes of numerous people, the crypto asset sector has successfully “broken the circle” and entered the traditional capital market, not by conventional mainstream crypto assets such as Bitcoin and Ethereum, but by the so-called NFT.
Cryptocurrencies are divided into two major segments, and one is fungible token(FT) represented by BTC, ETH, etc. Generally speaking, they have their blockchain and use the chain transactions to maintain the ledger data. FT tokens can replace each other and is divisible. The other type is the Non-Fungible Token or NFT, which has the characteristics of being unique and non-splittable.
The critical innovation of NFT, compared to FT, is that it provides unprecedented token ownership through decentralization.
Therefore, NFT anchors not the value itself but the value relationship of information and items on the blockchain. In other words, behind the NFT are “digital assets” issued on the blockchain, which can be game props, artworks, stocks, equity, properties and have the same uniqueness and irreproducibility as physical assets.
Based on the uniqueness and indivisibility, NFT can theoretically pass on any valuable things and trace the ownership of the information utilizing ownership tagging, thus realizing the intersection of data and value. And with the rapid development of the digital economy worldwide, the digital form of all production and life factors gradually become the everyday existence of the background of the times, undoubtedly making the future of NFT an ocean that is yet to be explored.
“Essentially, NFT creates digital scarcity,” said Arry Yu, chairman of the Cascadia Blockchain Committee of the Washington Technology Industry Association and managing director of Yellow Umbrella Ventures. Indeed, in the early days of the technology, several NFTs already existed in the form of digital creations elsewhere, such as securitized versions of iconic video clips from NBA games that are already circulating on Instagram as digital art.
However, locking down the information and value through technology alone is not what NFT is all about. The NFT asset ownership changes the way transactions are conducted: the transfer of asset value and transactions are accomplished through a decentralized approach to achieve an effective difference. Based on this, NFT has been hailed by the market as the next trillion-dollar blue ocean market comparable to the DeFi boom.
According to DappRadar data, in July this year, the total number of users of OpenSea, the NFT trading market, exceeded 20,000, and the average monthly transaction amount exceeded $1 million. In the global market, the daily active wallets in the Ether NFT category alone grew 350% in the third quarter of this year compared to the second quarter, while the transaction volume grew 57% year-on-year; compared to 2019, the transaction volume grew 368% to reach an all-time high of $20 million.
From the user’s perspective, they can enter as buyers participating in the marketplace and as sellers creating customizable online stores to complete the sale of their NFT pieces. For example, Beeple conducted the first online auction of the digital collection Everyday: The First 5000 Days at Christie’s, with a starting bid of $100 and a final sale price of approximately $69.3 million after 220 bids world record for a digital art auction.
Where is the final loop of NFT’s “value machine”?
The lowering of the verification threshold before the transaction, eliminating the cost of trust in the transaction, fully releasing the liquidity of its value while ensuring the scarcity of its value in the transaction. With the support of both model innovation and concept innovation, NFT is recognized by more and more players, and phenomenal application scenarios such as “meta-universe” are opening new explorations based on NFT.
However, the transfer of asset value based on the effective change of ownership through NFT transactions is not fully formed as a closed-loop at present. Problems such as inefficiency, slow price discovery, centralized pricing power, profit distribution, complete value discovery, and many other transaction links have become the key to the entire outbreak of this “value machine” NFT. This is also the core reason why NFT auctions are hot, but the actual trading volume is much lower than that of various Swap.
Currently, most of the NFT trading platforms are yet to support users to define the entirety of the transactions independently. This includes pricing, distribution, and auction format. Specifically, a few collectors and head dealers hold the pricing and offering rights of NFT works, especially some head NFTs, and ordinary players have a low chance to participate in the auction.
In addition, the NFT market is still in the early stages of development; if the transaction and liquidity problems can not be solved, different products will inevitably encounter bottlenecks, the current market surge is likely to become a flash in the pan. The most typical is that the recent NFT auction transactions are mainly counter-party aggregation types, requiring multiple quotes repeatedly, inefficient transactions, fragmented trading sentiment, lack of liquidity, and slow price discovery.
For copyright owners, several NFT auctions and trading platforms only support copyright owners in realizing revenue from the first auction, but not from the secondary market. In a sense replicating the traditional auction format, the NFT becomes a single, one-way copyright sale for the copyright owner.
For the copyright purchaser, the head artist receives the lion’s share of the market profits. The actual long-tail works of superior quality do not have the opportunity to be fully discovered. On the other hand, the content and metadata represented by NFT are stored separately from the smart contract itself, as it is too voluminous and cumbersome to be stored on the blockchain. It is difficult for players to value NFT works effectively. There is no credible price reference for NFT individual pieces, posing an extremely high threshold for traditional art investment enthusiasts.
The above problems make the current NFT trading field still profoundly dependent on the “fan economy” model for a long time. For example, those who have a large following on Twitter, Instagram, or YouTube, and those who are more active in the community, are likely to have access to more potential customers and have more first-mover advantage.
However, the market is ultimately focused on the value anchored by the NFT itself, and users are ultimately focused on the revenue and experience, not just the gimmick. Therefore, to form the final closed loop of the NFT trading market, to open the “last mile” of the trillion-dollar market, we still need to continue to iterate and experiment around the “value-driven machine (NFT).
CryptoShow, the NFT auction, and depository trading platform, combines financial logic and model innovation to bring the market the possibility of breaking through the bottleneck.
CryptoShow is the world’s first permissionless NFT auction and depository trading platform. Based on BSC, it supports BEP-721 and BEP-1155 standards when doing relevant transactions. CryptoShow allows users to empower and trade assets through priced issuance, multi-format auctions, NDR, AMM, etc., along with a variety of liquidity enhancement solutions.
CryptoShow’s innovative model opens up the closed-loop of NFT transactions.
CryptoShow’s NFT asset-based solution creatively breaks down the traditional NFT trading process into three processes: NDR depository → public offering → private offer.
NFT copyright holders can deposit and split NFT into multiple standard Bep20 NDRs through NDR (NFT Depository Receipt) on CryptoShow, and these NDRs will be priced in the market through AMM.
It can be simply understood as a market-oriented way of indirect issuance of NFT. CryptoShow first deposits the NFTs and generates a certain number of transferable agreements (NDRs) before they are traded in the market.
The most significant advantage is that it neutralizes the difficulty of NFT indivisibility for market trading, solves the problem that copyright owners can only sell single copyrights, and also allows ordinary investors to participate in the market trading of high-quality NFTs, effectively eliminating the market pain point that a few collectors and head dealers hold head NFTs.
And from the overall design logic, the initial liquidity of NDRs originates from the issuance and ends when the privatization invitation is established. Based on ensuring liquidity, the use of AMM using the classical inverse proportional price curve also effectively provides the pricing of the wide range.
In this regard, NDRs generated based on the initial NFT agreement will go through two core stages: “public offering” and “privatization.”
In the “public offering” phase, the number of NDRs is determined, and the issuance is completed. The number of NDRs will be determined based on the number of participating addresses at the time of issuance. After the number is confirmed, NDRs can complete the offering through various methods such as whitelist acquisition, ascending auction, and fund share subscription. CryptoShow will retain 10% of the auction amount and NDRs as an initial liquidity plan during this period.
The final transfer of NFT ownership is effectively completed during the “Invitation to Privatize” phase. In which, users holding sufficient margin can make privatization invitations for NFTs corresponding to NDRs. It is worth noting that the privatization invitation can be made when the price of the privatization invitation is higher than 120% of the price at the time of the offer. If the offer price of NDRs is not maintained at 95% above the invitation price within the minimum specified period, the privatization will be ruled invalid. If the offer price of the NDRs meets the requirements during the offer period, the privatization will be approved, and the entire amount of the privatization will be cashed out to the holders of the NDRs.
It can be said that in the innovative NDR model, the two core aspects of the public offering and the privatization invitation, the former effectively solves many pain points such as price discovery, repeated offers, inefficiency, and lack of liquidity, and buffers the opportunity for long-tail works of excellent quality to be fully discovered by the market. The latter returns to the logic of NFT ownership transfer and brings the NFT market price infinitely closer to the value it carries: issuers have higher returns, players gain credible price references and valuations, and objectively lowers the threshold for traditional art investment enthusiasts.
Upgraded issuance method, fairer pricing method, from the traditional single-point bidding decided by a few people to multi-point continuous bidding.
Fragmentation of the smallest trading unit, providing traders with the opportunity to participate in the pricing of top artworks.
Give investment collectors complete pricing reference, allowing traditional investors to enter the NFT investment collection field more.
Give all kinds of works full pricing and growth opportunities so that new independent authors can also have a better chance to discover the value of their works.
Amplify the importance of distribution so that the work’s copyright owner can get continuous full-chain revenue.
Overall, CryptoShow’s product design combines all mainstream product functions, including NFT asset auction platform (casting, publishing, auction, transfer), NFT asset-based solution (public distribution and private solicitation based on NDRs), mining, crowdfunding, etc. It can be an app, crypto-collectible, crypto artworks, virtual space control, or identity/rights authentication. It can be used to the most promising market segments such as crypto-collectibles, crypto artworks, virtual space control rights, identity/rights authentication, game props based on the Bep-1155 protocol.
Finally, let’s take a look at CryptoShow’s ecosystem tokenomics. SHOW has a total initial issuance of 1 billion.
1. Total Supply 1,000,000,000 (1 Billion)
Seed Round 5%
Strategic Round 13%
IDO-Up Auction 2%
LP/trading/single coin/shard LP mining 40%
NDRs trading/liquidity bonus 18%
Community Activity Vault 10%
Team Incentive 10%
Liquidity set-aside 2%
2. SHOW Token application logic
Fundraising credentials: 10%-20% of NDRs in the public issuance phase are only for SHOW’s holding users.
Revenue Voucher: CryptoShow platform equity representative to get chain revenue reward.
Governance Voting: SHOW will act as the equity representative for the combined area’s governance and decision-making.
Linkage trading: SHOW will cast for Bep-1155 Token linkage NDRs trading.
Our opinion about the NFT’s core value
Speaking of which, let’s go back to NFT itself, now NFT is still in a relatively early stage, NFT + IP artwork route or the current standard route, just like the artwork is to return to value, NFT + financial combination is most likely to break through the barriers, the NFT space will have the most opportunity to transfer all the economic volume of the traditional world to the blockchain, and ultimately realize the digitization of assets.
And this is the core value of NFT. Just like CryptoShow proposed NDR – publicized issue – private invitation of NFT asset-based solutions, there are similar proposed fragmentation projects or explanations, the financialization of NFT needs someone to make a breakthrough, which is not just as simple as increasing liquidity, or to promote a new world impression. NFT is not only artwork. It is more of a financially driven space that will eventually open a complete financial system.
We believe that there are projects or solutions such as CryptoShow, to explore more possibilities, to open up the last “mile” of NFTs’ unexplored space, which will undoubtedly promote the successful development of NFT.